Yahoo might have finally resolved the long-lasting Alipay dispute, but the company’s U.S. holdings are still worth a fraction of what they once were. Bloomberg Businessweek is now reporting that Yahoo's stock decline has cost its shareholders so much money that a buyer would be able to acquire the company for less than the value of its stakes in Alibaba and Yahoo Japan.
Yahoo’s value has dropped a staggering 91 percent over the past decade, says Bloomberg, and the company—which rejected a $47.5 billion offer from Microsoft three years ago—is now worth just $14 billion. Now, some are suggesting that CEO Carol Bartz should put Yahoo up for sale to recoup the company’s huge losses.
According to Thornburg Investment Management, Yahoo’s investments in Alibaba Group and Yahoo Japan could be worth 44 percent more than Yahoo itself. As of this morning, Yahoo stock had risen 5.6 percent from the previous day to a value of $11.71. Meanwhile, Thornburg estimates that Yahoo’s Asian assets alone could be worth almost $16 a share.
In the event of a takeover, “What you get is the core U.S. business for free,” said Thornburg analyst Di Zhou, adding that Yahoo Japan and Alibaba are “more than enough to explain the current stock price. That was our initial investment thesis.”
So who might bid on the company? Bloomberg says that the purchase would make sense for Providence Equity Partners as well as Hellman & Friedman in San Francisco. Microsoft could now buy Yahoo for half of what it offered three years ago, and “start making money right off the bat” according to analyst Sameet Sinha of B. Riley & Co.